Exhibit 99.1
FOR IMMEDIATE RELEASE
- ---------------------
CONTACT:
Edward J. Lawson, President and Chairman, 21st Century Holding Company
(954) 308-1257 or (954) 581-9993
21st CENTURY HOLDING COMPANY REPORTS
SECOND QUARTER RESULTS WITH EARNINGS OF $0.48 PER SHARE
AND REAFFIRMS GUIDANCE
Lauderdale Lakes, Florida, August 3, 2005 - 21st Century Holding Company
(Nasdaq: TCHC), today reported results for the quarter ended June 30, 2005 (see
attached tables).
For the three months ended June 30, 2005, the Company reported net income
of $3,023,541, or $0.48 per share on 6,349,182 undiluted shares, versus net
income of $3,674,778 or $0.63 per share on 5,794,893 undiluted shares in the
same three-month period last year. On a diluted share basis, the Company
reported earnings of $0.46 per share, based on 6,620,510 average diluted shares
outstanding for the three month period.
For the six months ended June 30, 2005, the Company reported net income of
$8,843,821, or $1.43 per share on 6,171,134 undiluted shares versus net income
of $6,598,786 or $1.15 per share on 5,718,104 undiluted shares in the same six
month period last year. On a diluted share basis, the Company reported earnings
of $1.35 per share, based on 6,550,789 average diluted shares outstanding for
the six month period.
Net premiums earned increased $5.7 million or 34.8% to $21.9 million for
the three months ended June 30, 2005, as compared to $16.2 million for the same
three-month period last year. Net premium earned increased $12.2 million or
43.0% to $40.7 million for the six months ended June 30, 2005, as compared to
$28.5 million for the same six month period last year.
Total revenues increased $5.9 million or 32.0% to $24.6 million for the
three months ended June 30, 2005, as compared to $18.7 million for the same
three-month period last year. Total revenues increased $13.1 million or 39.4% to
$46.5 million for the six months ended June 30, 2005, as compared to $33.4
million for the same six month period last year.
Loss and loss adjustment expenses increased by $4.7 million, or 61.6%, to
$12.3 million for the three months ended June 30, 2005, as compared to $7.6
million for the same three month period last year. Loss and loss adjustment
expenses increased by $5.1 million, or 36.4%, to $19.2 million for the six
months ended June 30, 2005, as compared to $14.1 million for the same six month
period last year. The loss and loss adjustment expense increase for both the
three months and six months ended June 30, 2005 can be primarily attributed to
loss development from the four hurricanes that occurred in August and September
of 2004.
For the 2005-2006 hurricane season, the reinsurance treaties will insure
us for approximately $212.0 million, with the Company retaining the first $3.0
million of loss and loss adjustment expenses. The treaties have provisions
which, for a prepaid premium, will provide an automatic reinstatement of another
$212.0 million of loss and loss adjustment expense for a second occurrence, with
the Company retaining the first $3.0 million. Unused coverage from the first two
events carries forward to events beyond the second, in conjunction with a
lowered attachment point as afforded by the Florida Hurricane Catastrophe Fund.
Edward J. (Ted) Lawson, President and Chairman of the Board, said, "I am
pleased with our earned premium and revenue growth to date. I expect these
trends to continue through the balance of this year and next. We've now earned
$1.43 per share through the first half of this year; therefore, our yearly
guidance of $2.75 to $2.80 per share is hereby reaffirmed."
The Company will hold an investor conference call at 4:30 PM (ET) today,
August 3, 2005. Mr. Lawson, Mr. Richard A. Widdicombe, CEO, and Mr. J. Gordon
Jennings III, CFO, will discuss the financial results and review the outlook for
the Company. Messrs. Lawson, Widdicombe and Jennings invite interested parties
to participate in the conference call. Listeners can access the conference call
by dialing toll free 888-460-6235. Please call at least five minutes in advance
to ensure that you are connected prior to the presentation.
About the Company
The Company, through its subsidiaries, underwrites standard and
non-standard personal automobile insurance, flood insurance, general liability
insurance, mobile home insurance and homeowners' property and casualty insurance
in
the State of Florida. The Company underwrites general liability coverage as an
admitted carrier in the States of Louisiana, Texas and Alabama for more than 300
classes of business, including special events, as well as homeowners' coverage
in the State of Louisiana. The Company also operates as an approved
(non-admitted) carrier in the States of Georgia and Kentucky offering the same
general liability products. In addition, the Company has underwriting authority
and processes claims for third party insurance companies. In addition to
insurance services, the Company offers premium finance services to its insureds
as well as insureds of certain third party insurance companies.
Safe harbor statements under the Private Securities Litigation Reform Act
of 1995: Statements in this press release that are not historical fact are
forward-looking statements that are subject to certain risks and uncertainties
that could cause actual events and results to differ materially from those
discussed herein. Without limiting the generality of the foregoing, words such
as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would,"
"estimate," or "continue" or the other negative variations thereof or comparable
terminology are intended to identify forward-looking statements. The risks and
uncertainties include, without limitation, uncertainties related to estimates,
assumptions and projections generally; inflation and other changes in economic
conditions (including changes in interest rates and financial markets); pricing
competition and other initiatives by competitors; ability to obtain regulatory
approval for applications to underwrite in an additional jurisdiction or for
requested rate changes, and the timing thereof; legislative and regulatory
developments; the outcome of litigation pending against the Company and any
settlement thereof; risks related to the nature of the Company's business;
dependence on investment income and the composition of the Company's investment
portfolio; the adequacy of the Company's liability for loss and loss adjustment
expense; insurance agents; claims experience; limited experience in the
insurance industry; ratings by industry services; catastrophe losses; reliance
on key personnel; weather conditions (including the severity and frequency of
storms, hurricanes, tornadoes and hail); changes in driving patterns and loss
trends; acts of war and terrorist activities; court decisions and trends in
litigation, and health care and auto repair costs; and other matters described
from time to time by the Company in releases and publications, and in periodic
reports and other documents filed with the United States Securities and Exchange
Commission. In addition, investors should be aware that generally accepted
accounting principles prescribe when a company may reserve for particular risks,
including litigation exposures. Accordingly, results for a given reporting
period could be significantly affected if and when a reserve is established for
a major contingency. Reported results may therefore appear to be volatile in
certain accounting periods.
#####
21st CENTURY HOLDING COMPANY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
Revenue: 2005 2004 2005 2004
---- ---- ---- ----
Gross premiums written $ 31,362,908 $ 31,810,045 $ 61,459,952 $ 49,627,771
Gross premiums ceded (2,053,152) (473,333) (4,954,443) (560,183)
------------ ------------ ------------ ------------
Net premiums written 29,309,756 31,336,712 56,505,509 49,067,588
Decrease in prepaid reinsurance premiums (2,835,083) (2,327,592) (5,510,378) (6,095,744)
(Increase) in unearned premiums (4,585,523) (12,770,311) (10,271,083) (14,499,217)
------------ ------------ ------------ ------------
Net change in prepaid reinsurance premiums and (7,420,606) (15,097,903) (15,781,461) (20,594,961)
unearned premiums
------------ ------------ ------------ ------------
Net premiums earned 21,889,150 16,238,809 40,724,048 28,472,627
Finance revenue 937,681 949,164 2,042,211 2,039,984
Managing general agent fees 620,378 539,822 1,252,693 987,180
Net investment income 910,925 773,921 1,803,796 1,302,045
Net realized investment gains 125,510 58,508 285,033 180,427
Other income 161,913 115,569 404,381 390,705
------------ ------------ ------------ ------------
Total revenue 24,645,557 18,675,793 46,512,162 33,372,968
------------ ------------ ------------ ------------
Expenses:
Loss and loss adjustment expenses 12,308,775 7,618,159 19,218,772 14,092,992
Operating and underwriting expenses 2,206,281 1,968,291 3,788,812 3,916,863
Salaries and wages 1,580,120 1,345,058 3,158,701 2,768,171
Interest expense 379,787 213,841 809,931 444,922
Policy acquisition costs, net of amortization 3,222,441 1,682,440 7,048,042 2,124,168
------------ ------------ ------------ ------------
Total expenses 19,697,404 12,827,789 34,024,258 23,347,116
------------ ------------ ------------ ------------
Income before provision for income tax expense 4,948,153 5,848,004 12,487,904 10,025,852
Provision for income tax expense 1,924,612 2,113,049 4,678,687 3,659,866
------------ ------------ ------------ ------------
Net income from continuing operations $ 3,023,541 $ 3,734,955 $ 7,809,217 $ 6,365,986
------------ ------------ ------------ ------------
Discontinued operations:
Income from discontinued operations
(including gain on disposal of $1,630,000 and $0, -- (98,583) 1,630,000 366,639
respectively)
Provision for income tax expense -- (38,406) 595,396 133,839
------------ ------------ ------------ ------------
Income on discontinued operations -- (60,177) 1,034,604 232,800
------------ ------------ ------------ ------------
Net income $ 3,023,541 $ 3,674,778 $ 8,843,821 $ 6,598,786
============ ============ ============ ============
Basic net income per share from continuing operations $ 0.48 $ 0.64 $ 1.27 $ 1.11
Basic net income per share from discontinued operations $ -- $ (0.01) $ 0.16 $ 0.04
------------ ------------ ------------ ------------
Basic net income per share $ 0.48 $ 0.63 $ 1.43 $ 1.15
============ ============ ============ ============
Fully diluted net income per share from continuing operations $ 0.46 $ 0.61 $ 1.19 $ 1.05
Fully diluted net income per share from discontinued operations $ -- $ (0.01) $ 0.16 $ 0.03
------------ ------------ ------------ ------------
Fully diluted net income per share $ 0.46 $ 0.60 $ 1.35 $ 1.08
============ ============ ============ ============
Weighted average number of common shares outstanding 6,349,182 5,794,893 6,171,134 5,718,104
============ ============ ============ ============
Weighted average number of common shares outstanding
(assuming dilution) 6,620,510 6,083,916 6,550,789 6,088,098
============ ============ ============ ============
Dividends declared per share $ 0.08 $ 0.08 $ 0.08 $ 0.08
============ ============ ============ ============
21st CENTURY HOLDING COMPANY
Balance Sheet Data
(Unaudited)
Period Ending
06/30/05 12/31/04
-------- --------
Total Cash & Investments $102,641,735 $ 90,509,879
Total Assets $162,308,858 $163,601,372
Unpaid Loss and Loss Adjustment Expense $ 26,025,816 $ 46,570,679
Total Liabilities $126,790,559 $138,624,637
Total Shareholders' Equity $ 35,518,299 $ 24,976,735
Premium Breakout
----------------
Line of Business 06/30/05 06/30/04
- ---------------- -------- --------
Automobile 20.9% 23.7%
Homeowners' 59.8% 61.7%
General Liability 18.8% 12.8%
Mobile Home Owners 0.5% 1.8%
----- -----
Gross Written Premiums 100.0% 100.0%
Loss Ratios
-----------
3 Months Ending 6 Months Ending
Line of Business 06/30/05 06/30/04 06/30/05 06/30/04
- ---------------- -------- -------- -------- --------
Automobile 72.67% 78.73% 63.26% 79.47%
Homeowners' 83.40% 25.88% 47.07% 25.32%
General Liability 20.79% 25.45% 23.04% 22.80%
----- ----- ----- -----
All Lines 66.92% 45.00% 47.19% 47.08%